Microsoft Targets VMware Service Providers With New Hybrid Cloud Program

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TeleComputing, a Microsoft partner since 1997, isn't dropping VMware altogether, but TeleComputing's Espeseth said the cost benefits are too significant to ignore.

TeleComputing is also saving money by using System Center to automate operations, he said. "This can actually drive costs lower than just moving licensing from VMware to Microsoft," Espeseth said. VMware couldn't be reached for comment.

If the program works, Microsoft will be able to further stake its claim as the only vendor that can do public and private cloud with a high level of proficiency. Microsoft often says running large scale Internet services like Bing, Skype, Office 365 and Outlook.com has given it experience other vendors don't have.

"The fact that we are a large Internet-scale services provider ourselves gives us lots of advantages to the customer," Microsoft's Numoto said. "We can deliver economies of scale back to them, and this also drives a lot of IP development and learning."

Yet Microsoft's cloud storyline isn't unique -- Amazon Web Services executives like to tell a similar story about how they developed technology to run their internal operations and eventually realized it had grown into an enterprise-grade cloud portfolio.

IBM, by virtue of its SoftLayer acquisition, can also boast a public cloud that incorporates years of experience from SoftLayer's origins in the hosting business.

Nonetheless, Numoto insisted that Microsoft is "uniquely" positioned in the hybrid cloud space.

"We're the only ones with huge scale Internet cloud services, and also a presence in the on-premise customer environment," he told CRN. "Other, more traditional enterprise vendors talk about being enterprise grade, but they don't have the first-party services."

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